JOMO KENYATTA UNIVERSITY OF AGRICULTURE AND

TECHNOLOGY

PUBLIC MANAGEMENT AND DEVEELOPMENT

RODGERS OBWOGE ONDIBA HDC223-0391/2018

EFFECT OF RENUMERATION ON EMPLOYMEES'PERFORMANCE IN

NYAKOBA TEA FACTORY AT IKEJA SUB COUNTY, KISII COUNTY.
 CHAPTER ONE

1.0 INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Remuneration refers to the mode of compensating the workers exerting their energy or spending
their energy or spending their time in accomplishing their organization’s objectives. Employee
remuneration can defined as, "the reward or compensation given to the employees for their work
performances," according to Management Study Guide. Remuneration is a method of promoting
morale, increasing motivation and foster team cohesion, one of the strongest determinants of
employee attitudes, motivation and behaviors is Remuneration (Wayne, 1992).

Remuneration is the process of providing financial compensation to employees for their work.
This may include wages, salaries, bonuses, commissions, and other forms of payment. It is an
important aspect of the employer-employee relationship, as it helps ensure that employees are
adequately compensated for their work.

Remunerations can be inform of many forms including; Base salary - A base salary is the fixed
amount of money that an employee receives each month, regardless of the hours they work or the
tasks they complete. It is usually determined by the employee’s job title and experience level,
and is meant to cover their basic living expenses.

Bonus payments are awarded to employees who go above and beyond their normal duties, or
who complete a project or task in a timely manner. Bonuses can come in the form of cash, stock,
or other incentives. Commission is a percentage of a salesperson’s total sales that the company
pays to the employee as a reward for their sales efforts.

Stock remuneration option: Stock options give employees the right to purchase a certain number
of shares of the company’s stock at a discounted price. This incentivizes employees to increase
the company’s stock price, as they will benefit from the increase in value. However
remunerations which come in form of benefits are non-cash forms of compensation such as
health insurance, vacation time, and retirement savings plans. They can help to reduce an
employee’s financial burden, and can be a powerful incentive for job seekers.
Global remuneration considers international issues in employee compensation. This includes pay
for foreign employees and people working at overseas locations. Handling compensation
policies, including wages and benefits, can be made much more complicated when people have
to consider international law, differences in cost of living, and variances in working
environments. Companies with global operations may hire a consultant to handle this aspect of
human resources to ensure they remain competitive with other firms in the industry. One issue in
global remuneration is how much to pay employees. Those working in overseas operations may
be living in sites with a higher cost of living and less purchasing power parity. As a result, they
may need to earn more than domestic employees. The economic climate could also be worse,
which means people may make less, but this could become a problem when people posted
overseas compare wages and benefits with employees who remain in the home nation.

Africa HR is partnering with Emergence Growth to provide salary surveys across Africa.
Employers must offer competitive total remuneration packages to attract retain and motivate
staff. The only way to ensure your package is competitive is to rely on market data provided by
reliable suppliers. On In Kenya Salary and Remuneration Commission, on 7 October 2012, the
commission declared a hefty exit package that MPs had awarded themselves illegal and indicated
that it would move to court to block it. Following extensive research in the United States, UK,
Canada, Australia, South Africa, Tanzania and Rwanda, the commission released a new salary
structure on 5 February 2013. The structure had significant cuts to the pay of state officers. They
also appealed to the public to make their suggestions so that they can be taken into consideration.
This is one kind of the roles that the commission is supposed to champion. The work
environment has undergone considerable changes over the past years in terms of the nature and
scope of work.

The changing nature of the work environment has necessitated different ways of human resource
approaches, yet an important and constant factor has been the ways in which managers motivate
their workers to help achieve not only the organizational goals but also that of their own personal
targets, to begin with Market trends, Nyankoba tea Factory, Consider the current and projected
market trends, such as inflation rates and cost of living, to ensure that your remuneration
packages remain competitive and attractive.
Job duties is another factor which is being used at Nyankoba Tea Factory to set remunerations
and acquire required labour force. Employees are paid according to their qualification and the
level of skill they possess. Consider the duties and responsibilities of the job and adjust
remuneration accordingly. Rewarding employees for their additional efforts and hard work is
important.

The HR would evaluate employee performance, each employee’s performance and set rewards
accordingly. This could include bonuses, stock options, and other monetary incentives. The
factory budget majorly is used to ensure the remuneration packages are in line with the factory’s
budget considering the financial impact of the remuneration and the factory’s financial health.
1.2 Statement of Problem

Due to high levels of unemployment in Kisii County and Kenya in general, majority of the
employees are not being adequately compensated for the work they are doing, which is leading
to a dissatisfied workforce and a lack of motivation to perform at a high level. This arises as a
result individuals opting to have a source of income, however little it is as long as at the end of
the day they earn something rather than being jobless.

Currently, employee remuneration is often based on a variety of factors such as job performance,
seniority, and skills. As a result, it can be difficult for Factory to ensure that their remuneration
packages are fair, consistent, and appropriate. This can lead to employees feeling undervalued, or
to businesses paying too much for the skills they require. Additionally, the lack of universal
remuneration standards presents a challenge for firms as they must decide which factors to
emphasize and how to balance them.

The problem of employee remuneration is complex and requires careful consideration and
planning. Firms need to ensure that their remuneration packages are fair, equitable, and well-
structured. In order to do this, they must consider the needs of their employees, the demands of
the job market, and the ability of the business to remain competitive. By taking a thoughtful
approach to remuneration, businesses can ensure that they are able to attract and retain talented
employees while also remaining profitable. (Ketra, R. 2018, Employeed performance and
remuneration, a case Study of Kisii County).
1.3 Objectives of the Study

1.3.1 General Objective

Effect of renumeration on employees ‘performance in Nyakoba Tea Factory At Ikeja Sub County,
Kisii County.

1.3.2 Specific Objectives

1. To determine the impact of remuneration on the productivity, morale and overall

performance of employees in a tea factory.
2. To assess the effects of different remuneration packages on employee motivation and job
satisfaction.
3. To identify the factors influencing the effectiveness of remuneration schemes in a tea
factory.
4. To examine the relationship between remuneration and employees’ job commitment and
engagement.
5. To explore the impact of remuneration on the overall quality of work in a tea factory.

6. To analyze the effects of remuneration on the retention of employees in a tea factory.

1.4 Research Question

1. How does the remuneration rate affect productivity, morale and overall performance of
employees in Nyankoba tea factory?
2. What are the effects of different remuneration packages on employee motivation and job
satisfaction?
3. What are the factors influencing the effectiveness of remuneration schemes in Nyankoba
tea factory?
4. What is the relationship between remuneration and employees’ job commitment and
engagement?
5. What is the impact of remuneration on the overall quality of work in Nyankoba tea
factory?

6. What are the effects of remuneration on the retention of employees in Nyankoba tea
factory?

1.5 Significance of the Study

The study on the Effect of Remuneration on Employees' Performance in Nyakoba Tea Factory in
Kisii County is significant because it provides valuable insight into how remuneration impacts
the performance of employees in a tea factory in Kenya. The findings of the study could be used
to improve the remuneration strategies of the tea factory in order to motivate employees and
improve their performance.

Furthermore, the study can help inform the development of policies and strategies to ensure that
employees in the tea industry in Kenya are adequately and fairly compensated. Additionally, the
study can also help other tea factories in Kenya to gain a better understanding of the importance
of remuneration and its effect on employee performance. This knowledge can then be used to
develop remuneration strategies that will help to improve employee performance. Thus, the study
of the Effect of Remuneration on Employees' Performance in a Tea Factory in Kenya is an
important and valuable contribution to the tea industry in Kenya.

This study will help to identify the factors that lead to improved performance of employees in a
tea factory in Kenya and how remuneration plays a role. This will help management to make
informed decisions on how to improve the performance of employees.

This study will help to understand the impact of remuneration on the motivation and satisfaction
of the employees in Nyakoba tea factory. Knowing this can help management to create a better
working environment and ensure that employees are adequately compensated for their work.

This study will help to identify the challenges faced by employees in Nyankoba tea factory and
Kenya in general and how remuneration can help address them. This will help management to
better understand the needs of their employees and create better policies to address their needs.

This study will help to identify the impact of remuneration on employee productivity and the
overall performance of the tea factory in Kenya. This can help management to create incentive
plans that encourage employees to work harder and be more productive.

1.6 Scope of the Study

The scope of this study will focus on the effect of remuneration on employees' performance in a
tea factory in Kenya. This study will investigate the factors that influence remuneration and its
effect on employee performance in terms of job satisfaction, motivation, loyalty, and
commitment. The study will also analyze the relationship between remuneration and
productivity, turnover, and absenteeism. Additionally, the study will analyze the role of
remuneration in the retention and advancement of employees. Finally, the study will assess the
impact of remuneration on employee morale and job satisfaction.
 CHAPTER THREE.
METHODOLOGY

3.0 Introduction
For this research to be effective, research design, data collection and analysis were used to arrange
the information in such a way that enabled the researchers to come up with the reliable
recommendations and conclusions. The following were the methodologies employed starting with
the Research design, study Population and sample, Sampling Techniques, Data Source and
Collection, and research Instruments and Data Analysis.
3.1 Research design:
Orodho (2003) defines it as the scheme, outline or plan that is used to generate answers to research
problems. Research design can be regarded as an arrangement of conditions for collection and
analysis of data in a manner that aims to combine relevance with the research purpose. It was the
conceptual structure within which research was conducted. It constituted the blueprint for the
collection, measurement and analysis of data.

3.2 The study Population:

This study will be conducted in Nyakoba Tea Factory At Ikeja Sub County, Kisii County. In the
processing industry that include both expatriates and the national. The different nationalities and
backgrounds will help the researcher understand the different remuneration pattern of the
employees, the organization has approximately 60 employees working full time in the Factory.
3.3 Sampling design and size
3.3.1 Sampling Techniques
According to Orodho and Kombo, (2002), sampling is the procedure researcher uses to gather
people, places or things to study. It is a process of selecting a number of individuals or objects
from a population such that the selected group contains elements representative of the
characteristics found in the entire group.

Simple random sampling this method is referred to as simple random sampling as no complexities
is involved. This study employed simple Random sampling techniques, because it was easy to use
basing on the research experience

This ensured that each sub-group characteristic will be represented in the sample thus raising the
external validity of the study.

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Simple random techniques will be used to ensure that each member of the target population will
have an equal and independent chance of being included in the sample. This method produces a
random sample.

3.3.2 Sample size

The sample consisted of 24 respondents from various department selected from the population 60
employees currently working at Nyakoba Tea Factory At Ikeja Sub County, Kisii County.

The 24 respondents were distributed as questionnaires randomly in the major departments,

because the researchers believed that they were more informed concerning the topic under study,
and they have been in the study environment for a long period of time.

This number (60) had been chosen according to Amin, using tables to determine the sample size.

3.4 Data Source

The researcher will collect both primary and secondary data. Primary data will be collect from
respondents through questionnaires, interviews and informal group discussions while secondary
data will be obtained from books, journals, internet and other documents.

3.5 Data Collection methods and instruments 3.5.1 Data collection

The study will use questionnaires, document analysis, interviews and informal group discussions
as the main tools for collecting data. The selection of these tools has been guided by the nature of
data to be collected, the time available as well by the objectives of the study. The overall aim of
this study was to find out the contribution remuneration give towards employee's performance.

3.5.2 Instruments 3.5.2.1 Questionnaire

Questionnaires will be to collect primary data from the respondents, in form of writing to express

their views.

Questionnaires will be used since the study was concerned with variables that cannot be directly
observed such as views, opinions, perceptions and feelings of the respondents.

3.5.2.2 Interviews
The researchers will use interviews as a follow-up to the questionnaires in order to collect

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information that were not directly obtained or were difficult to put down in writing.

Interviews will be useful to capture the meaning beyond the words. This technique has been
chosen because it helped the researchers gain control over the line of questioning.

3.5.2.3 Focus Group discussions:

This is a special type of group in terms of its purpose, size, composition and procedures. A focus
group will be composed of 6-8 individuals who share certain characteristics, which will be
relevant for the study. The discussion will be carefully planned and designed to obtain
information on the participations beliefs and perceptions on defined area of interest.

3.5.2.4 Document Analysis

The researcher will critically public and/or private recorded information relating to contribution of
remuneration towards the employee performance the researchers will be able to obtain data that is
thoughtful. The researcher will be able to access data at their own convenient time; this will be
through distributing the respondent's questionnaires so that be filled according to their freedom.

3.5.3 Research Procedure

Both qualitative and quantitative data were collected from the 24 respondents from the targeted
population of 60 employees working in Nyakoba Tea Factory At Ikeja Sub County, Kisii County
May — July period, using questionnaires, interviews, informal group discussion and document
analysis The data will be collected by the researcher himself in that he understands the importance
of the issue at hand into details.

3.6 Validity and reliability of the research instruments:

Amin, 2005) no interviewers are alike and the same person may provide different answers to
different interviewer, the manner in which the questionnaire will be formulated are simple most
questions will be closed ended. This is intended to provide right answers to the particular
questions, for the case of this study the research avoided asking personal harmful questions that
could hinder the respondent from replying, 80% of the data collected will be considered reliable.
According Donald et.al, (2006) reliability is a measure of how consistent the results from a test are,
if you administer a test to a subject twice do you get the same score on the second administration as
you did on the first? The reliability of the test is the answer to this question.

To establish the validity, the instruments will be given to an expert to evaluate the relevance of
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each item in the instruments to the objectives.

3.7 Data Analysis

Data collected will be edited and analyzed using percentages, tables of frequencies and graphs and
pie charts modules like frequency distribution to examine the feeling of employees regarding
compensation they receive. Quantitative data analysis will be performed in relation to research
questions.

Statistical finding will be interpreted in relation to the research objectives and conclusion will be
made based on that.

3.8 Assumptions and Limitations

Assumptions

The researchers will assume that the respondents would provide them with correct information.
The researchers also will assume that the employees are not under any influence; internal or
external that may hinder them giving right information during the answering the questionnaires.

3.9 Limitation of the study

The major limitation of this study was financial constrain, that would facilitate the movement of
researcher from Nairobi to Kisii, and the inability of some respondent who may not be conversant
with English, this will give researcher a challenge of translating the question to be understood, and
despite giving them opportunity to fill the questionnaire at their freedom still others employees
needed researchers guidance.

Due to the nature of work in the processing Industry like the factory, the employees may be busy
taking long time answering research questions, may not be possible that was why it will be given
to them to be filled at home during their leisure time.

The researcher will try his best that the questions will be short and direct, so that respondents will
have time answering these questions.

3.10 Ethical considerations.

The problem that the researcher encountered in this study was the privacy and confidentiality of the
respondents at all time since, the study was regarding employees' compensation and most people do

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not want their financial status to be disclosed; therefore as such the researcher accepted to avoid
personal question but prefer asking general questions, and promised to them that this study was
meant for academic purpose only.

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